Hiya again, been away again. [:0)]
A company of mine is about to start trading from it’s trust ( property investing ), I am about to spend up on set up costs.
Can someone tell me if I can generate zero income, and then claim my setup fees( substantial )in the 2003 / 2004 year ?
Also am I able to buy a property & call it my office ( ave. 3 bed brick any suburb, furniture, car(s), office equip. & proffessional fees. ) within the trust’s set up costs ?Input please[
] will be grateful for great advice[^]Michael
just beDo you mean generate zero income or generate less income than expenses incurred?
Mel
Hiya Mel [
]Generate zero income in this financial year only, then in the next year put some IP’s in the family trust. Say this is done around the April – June time of 2004, then come July – August will be trading with both income & expense .
Is it possible our does ATO not allow ?
Michael
just beMichael
What may seem like a simple questions is fairly complex. Your trust can make a loss, income less than expenses but this loss is carried forward into following year. Have to watch trust loss rules. Complex area. Tax Office dont like the idea of putting your ppor into trust. You would have to pay rent to trust on commercial terms for the use of the residence part of the house. The house will then become subject to captial gains tax if and when you sell. Maybe also higher stamp duty on purchase and may also be subject to land tax depending on which state you are in. Unless deductions for office are significant I would have to ask why you want to do this.
With setup costs it depends on what they are. Some are not deductible at all, others may be written off over 5 years.
Steve
Basically I’d like to buy at least one new car, I thought that instead of just purchasing one in my name I could start the trading from the trust knowing that income generation will not occur until maybe this time next year ?
Michael
just beMichael
i don’t know what you mean by setup fees. Some of what you mention can only be depreciated. the setup cost of the trust (trust deed etc) cannot be claimed (I think) as it is not really an expense of the trust. If your trust owns a car and you use it for personal reasons, then you will have to pay FBT. So really there would be no difference in buying it under you name or through the trust. Same with an office, if you are renting you could claim the office wheter or not it is ‘through’ the trust. You can do it in your own home too, but that may expose the property to CGT when you sell.
Terryw
Discover Home Loans
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Thank you TerryW,
My knowledge is increasing, thanks to this forum & people like yourself.
[^]
Michael
just be
] will be grateful for great advice[^]
]
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